Nordstrom celebrated milestones with full and off-price expansions, and rode consistent foot traffic to sales and earnings increases.
In a Nutshell: Nordstrom opened its first full-line men’s store in New York in the quarter and expanded its Rack operations to Canada.
The retailer acknowledged the Rack business underperformed during the period due to softness in the women’s business. In full-price, the company pointed out shoe sales in the quarter were off due to the weather but said departments like designer are a growth area with brands like Chanel, Gucci and Valentino.
Nordstrom has updated its outlook for earnings per diluted share based on its Q1 results from $885 to $940 million, or $3.30 to $3.55 per diluted share, to between $895 and $940 million, or $3.35 to $3.55.
Sales: Nordstrom reported net sales were up 5.8% in the quarter, ended May 5, over the prior-year period. The gains were attributed in part to moving the Nordstrom Rewards loyalty event from the second quarter in 2017 to the first quarter this year. The company also noted that Trunk Club showed “significant improvement,” particularly in customer signups.
Comparable sales inched up by 0.6% over the same period in 2017. Performance was a bit better when isolating out full price only (0.7%), which was boosted by strong kids’ and men’s business. Off-price comp sales were 0.4%, which was below plan.
Digital sales saw an 18 percent increase in the quarter.
Earnings: The retailer reported net earnings of $87 million, or 51 cents per diluted share, over the $63 million, or 37 cents per diluted share, it achieved during the first quarter last year.
CEO’s Take: “We continue to grow our strategic brand partnerships with a focus on establishing Nordstrom as the partner of choice for brands and providing customers with newness. We want to create a sense of discovery through these collaborations while supporting our regular price selling. Our strategic brands include new and emerging partners along with established ones,” said co-president Blake Nordstrom. “During a time of transformation in the industry, we’ve been investing in digital capabilities to expand our customer reach and engagement. This uniquely positions us to increase market share and drive growth. Our customer-focused approach informs how we allocate capital with the goal of driving customer engagement, market share gains, and improved profitability.”